Stamp duty anniversary

While birthdays are usually a cause for celebration, our most terrible tax turned 150 last week, and no one was popping the champagne.

 

New South Wales was the first colony to introduce stamp duty taxes in 1865. Other colonies soon followed, with Victoria and Queensland both jumping on board the gravy train within a year.

 

In fact, Queensland’s Colonial Treasurer Joshua P Bell applauded the introduction of the tax as “a magnificent mode of extracting money from the subject,” telling the Brisbane Courier in 1866 that “the only things I have forgotten to tax are babies. I do not think there is any charge for them; but I believe that in every subsequent phase of a man’s existence, from the time of his apprenticeship until he is laid under the sod, he will have to pay taxes under this Bill.”

 

Bell may be a footnote in history, but this archaic tax is alive and kicking. 

 

The Property Council has been supportive of the ACT Government’s tax reform program, and particularly the promise to replace inefficient stamp duty with increases to rates. 

 

We are, however, keen to ensure that that government maintains its promise of revenue neutrality as it moves to get rid of stamp duty and that the ACT’s tax reform program not result in higher levels of other taxes, fees and charges being applied, which would lead to brake on investment in the Territory.

 

Stamp duty revenues are unpredictable from year to year, and they hurt the local economy.  Many studies have confirmed that stamp duty discourages people from moving into more suitable housing – whether they have growing families, are retirees looking to downsize or are workers wanting to move closer to employment.

 

In fact, modelling from our Federal Treasury has found the nation’s economic welfare is reduced by 73 cents for every dollar of stamp duty collected.

 

Today, the average stamp duty cost for homebuyers in Canberra is $35,000. And with stamp duty costs rising by 537 per cent in the ACT over the last 20 years, this tax is not just a relic of our colonial past but a very real barrier to Australians wanting to build a better future.

                            

Catherine Carter is ACT Executive Director of the Property Council of Australia